International Business Management
Textbook Exam Questions
Course Introduction
International Business Management explores the strategies, structures, and operations of businesses that operate across national borders. The course examines how global economic, cultural, legal, and political environments impact managerial decision-making, market entry, and competitive strategy. Students learn about international trade theories, cross-cultural communication, global supply chain management, and multinational financial management. Emphasis is placed on developing skills to analyze global markets, adapt business practices to different regions, and manage diverse teams effectively in a complex international landscape.
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International Accounting 3rd Edition by Timothy Doupnik
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Page 2
Chapter 1: Introduction to International Accounting
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Q1) What term is used to describe the process of reducing foreign exchange risk?
A)international accounting
B)exposure
C)hedging
D)globalization
Answer: C
Q2) What percentage of world trade is represented by manufactured products?
A)66.5%
B)22.5%
C)8)5%
D)75.5%
Answer: A
Q3) International accounting can be defined in terms of which the following levels?
A)Supranational organizations
B)Company
C)Country
D)All of the above
Answer: D
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Chapter 2: Worldwide Accounting Diversity
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Q1) In code law countries such as Germany,France,and Japan,tax law and accounting standards tend to be:
A)unrelated.
B)very different.
C)similar.
D)more confusing than those in the U.S.
Answer: C
Q2) In the Nobes classification of accounting systems,micro-based accounting systems are derived from:
A)government models.
B)business models.
C)tax laws.
D)code law.
Answer: B
Q3) Which country includes a social report in the notes to financial statements?
A)Japan
B)Israel
C)Brazil
D)Germany
Answer: C
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Chapter 3: International Convergence of Financial Reporting
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Q1) According to the Norwalk Agreement,the FASB will monitor:
A)all IASB projects.
B)only those projects where they have a level of interest in the topic.
C)no IASB projects,since the IASB is capable of self-monitoring.
D)only those projects dealing with internationally complex issues.
Answer: B
Q2) Which of the following statements is true about accounting convergence?
A)Convergence is a synonym for harmonization.
B)Convergence is the opposite of standardization.
C)Convergence,unlike harmonization,takes place over a period of time.
D)Convergence means developing high-quality standards in partnership with national standard-setters.
Answer: D
Q3) From a practical standpoint,what is the goal of accounting standards harmonization?
A)Creating one set of standards used throughout the world
B)Reducing the conflict among national accounting standards
C)Producing accounting standards that are unique for each country
D)Forcing compliance with IASB regulations
Answer: B
Page 5
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Chapter 4: International Financial Reporting Standards:
Part I
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Q1) Which of the following is true about the IASB standards on Cash Flow Statements?
A)Cash flow statements are not required under the IASB standards.
B)Operating cash flows must be determined using the "direct method."
C)Operating cash flows may be combined with financing cash flows.
D)IAS 7 requires essentially the same information in the cash flow statement as U.S.GAAP.
Q2) Which of the following inventory valuation methods commonly used in the U.S.is NOT allowed under IAS 2 (Inventories)?
A)LIFO
B)FIFO
C)weighted average
D)retail inventory method
Q3) Which of the following items should be included in the cost of property,plant,and equipment under IAS 16?
A)all costs directly attributable to getting the asset to the proper location
B)import duties and taxes
C)estimated costs of removing the asset
D)All of the above should be considered part of the cost of the asset.
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Page 6
Chapter 5: International Financial Reporting Standards:
Part II
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Q1) Under IFRS 2,Share-based Payment,what approach is used to account for the transaction?
A)comparable transaction approach
B)fair value approach
C)market approach
D)notional value approach
Q2) Under IFRS 2,with respect to choice-of-settlement share-based payments,if it is the entity that has the right to choose between equity settlement and cash settlement,when must the entity choose the cash settlement?
A)if the supplier provides services
B)if the supplier provides goods
C)if the entity has a present obligation to settle in cash
D)The entity always has the option to choose either method.
Q3) The term "provision" as it is used in IAS 37,is most closely related to what term in U.S.GAAP?
A)Contingent liability,where the outflow of resources is "remote."
B)Contingent liability,where the outflow of resources is "probable."
C)Current liability,where the outflow is difficult to measure.
D)Reserve for bad debt,where the amount recoverable is "uncertain."
Page 7
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Chapter 6: Comparative Accounting
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Q1) Since the 1980s accounting regulation in the United Kingdom has been legislated more than it had been previously. What is the primary cause for this change from professional self-regulation to government regulation?
A)High profile scandals in the British business community.
B)Influence of the United States on the ICAEW
C)Directives from the European Union
D)All of the above.
Q2) By what title are professional accountants in Mexico known?
A)Certified Public Accountant (CPA)
B)Chartered Accountant (CA)
C)Contador Publico Certificado (CPC)
D)Mexican Certified Public Accountant (MCPA)
Q3) Which of the following countries has NOT had its accounting systems significantly influenced by Germany?
A)Switzerland
B)Denmark
C)Japan
D)France
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8
Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Q1) A bank exchanging foreign currency makes its profit in what manner?
A)on the difference between the spot rate and the foreign rate
B)A bank is forbidden,by law,to charge a premium in foreign currency exchange.
C)on the present value of the forward rate discounted to the date an option is purchased
D)on the difference between the retail rate and the wholesale rate
Q2) What has occurred when one company arranges to buy a foreign currency some time in the future,at an exchange rate quoted today?
A)The company has purchased a foreign currency option.
B)The company has entered a forward contract.
C)The currency has been devalued.
D)None of the above
Q3) What is a foreign currency transaction?
A)It is another name for an international transaction.
B)It is a transaction that involves payment at a date sometime in the future.
C)It is a business deal denominated in a currency other than a company's domestic currency.
D)It is an economic event measured in a currency other than U.S.dollars.
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Chapter 8: Translation of Foreign Currency Financial Statements
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Q1) Under FASB ASC 830,Foreign Currency Matters,when the temporal method is used,how are translation adjustments treated in the consolidated financial statements?
A)as gains or losses on the current period consolidated income statement
B)as prior period adjustments to retained earnings of the parent
C)as part of other comprehensive income on the consolidated balance sheet
D)None of the above because the temporal method is not allowed under FASB ASC 830.
Q2) Which of the following is not among the four methods which have been used to translate foreign currency financial statements globally?
A)the historic/non-historic method
B)the monetary/nonmonetary method
C)the temporal method
D)the current/noncurrent method
Q3) When the current rate method is used,the sign (+ or -)of the translation adjustment is the result of:
A)appreciation or depreciation of the foreign currency
B)the nature of the balance sheet exposure
C)both (A)and (B)
D)None of the above
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Chapter 9: Additional Financial Reporting Issues
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Q1) Under IFRS 8,which of the following criteria is NOT considered by all segments that are considered reportable business segments?
A)The segment must have revenue that is one-tenth or more of combined revenue.
B)The segment must have profit that is 10% or more of combined profit of all segments with profit.
C)The segment must have revenue that is more than half from external sources.
D)The segment must have assets that are 10% or more of combined segment assets.
Q2) A representative market basket of products cost $250 at the beginning of the year,and the same collection of products costs $280 at the end of the year. What is the annual rate of inflation?
A)10.7%
B)12%
C)112%
D)-10.7%
Q3) Holding monetary liabilities during a period of inflation results in:
A)purchasing power gains.
B)purchasing power losses.
C)transaction gains.
D)translation losses.
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Page 11
Chapter 10: Analysis of Foreign Financial Statements
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Q1) In order to address accounting diversity,financial analysts have adopted which of the following strategies?
A)limiting the geographic spread of their investments
B)taking a diversification strategy within a foreign country
C)investing only in foreign government bonds
D)all of the above
Q2) How would a company decide which foreign languages will be used to present its financial statements?
A)Determine which language is closest to the local language so that translation is less costly.
B)Choose the language based on which countries provide the greatest potential source of funds.
C)Follow the language requirements of its local accounting regulatory agency.
D)Select the language of the most populous country in its region of the world.
Q3) Which is NOT one of the basic steps in financial statement analysis?
A)prospective analysis
B)accounting analysis
C)translation analysis.
D)financial analysis
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Page 12
Chapter 11: International Taxation
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Q1) What is a withholding tax?
A)Income tax paid on corporate earnings.
B)an amount subtracted from a dividend payout and remitted to the government
C)This is an income tax corporations pay to local governments in addition to the national income tax.
D)taxes that lower the effective tax rate in a country
Q2) Which of the following is the most important type of Subpart F income?
A)Income from countries engaged in international boycotts
B)Income from foreign base companies
C)Income from insurance of U.S.risks
D)Income from illegal payments
Q3) What is the U.S.policy concerning taxing income of a U.S.corporation's foreign subsidiary?
A)Tax is imposed on the foreign subsidiary income in the year it is earned.
B)Tax is paid on the foreign subsidiary's income when the profits are returned to the U.S.parent as dividends.
C)The government of the U.S.does not tax foreign source income.
D)Tax credits for losses incurred by the foreign subsidiary are recognized by the parent currently,but taxes on profits are deferred until dividends are paid.
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Page 13
Chapter 12: International Transfer Pricing
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Q1) What is the primary difficulty of using market-based transfer prices for intercompany transactions?
A)markets that are too complex
B)lack of a well-developed market
C)lack of objectivity
D)operating inefficiencies are transferred from one subsidiary to another
Q2) What is the time frame in which taxpayers must produce documentation to the IRS,in which it justifies the transfer pricing method that it has selected as being the most reliable measure of arm's-length price?
A)90 days
B)60 days
C)immediately upon request
D)30 days
Q3) The "price" for using intangible property is called:
A)interest.
B)rent.
C)royalty.
D)service charge.
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14
Chapter 13: Strategic Accounting Issues in Multinational Corporations
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Q1) Which of the following is the role of a performance evaluation system in a multinational corporation?
A)monitor organizational effectiveness
B)identify areas that need improvement
C)assess how well division managers are doing
D)all of the above
Q2) In designing an effective management control system for a multinational corporation,the accountant should measure factors appropriate for each unit's level of responsibility. Which of the following measures would be appropriate for evaluating the performance of a profit center?
A)return on investment
B)residual income
C)EBIT
D)all of the above
Q3) What is a capital investment?
A)using money to buy goods or services
B)issuing shares of stock of the corporation
C)authorizing and issuing shares of common stock by a multinational corporation
D)committing resources to projects that have costs and benefits well into the future
Page 15
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Chapter 14: Comparative International Auditing and Corporate Governance
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Q1) What caused the U.S.Congress,the OECD,the International Federation of Accountants,and other organizations to enact stricter rules on corporate governance in recent years?
A)sudden increase in world trade
B)high-profile corporate scandals
C)significant decline in world trade
D)expansion of the European Union membership
Q2) Auditors in the United Kingdom sometimes include disclaimers of liability in their audit reports. According to the U.S.Securities and Exchange Commission,how effective is this approach to limiting civil liabilities?
A)It has no effect when included in the financial statements of U.S.companies.
B)It effectively caps the damage awards that will be made in U.S.civil courts.
C)It limits who can bring civil action in cases involving the audit of U.S.companies.
D)It limits both civil and criminal liability against auditors of U.S.companies.
Q3) Which of the following is the responsibility of an audit committee?
A)oversee the internal control system
B)oversee internal auditing and the independent public accounting function
C)monitor the financial reporting process
D)all of the above
Page 16
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Chapter 15: International Corporate Social Reporting
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Q1) The corporate social reporting (CSR)theory that environmental disclosures are made in response to a demand for environmental and social information is called the:
A)legitimacy theory.
B)stakeholder theory.
C)Superfund theory.
D)depletable resource theory.
Q2) The Treadway Commission Report in the United States published in 1987 used the phrase:
A)"bottom up accounting."
B)"top down accounting."
C)"management culture incentive."
D)"tone at the top."
Q3) The Intergovernmental Panel on Climate Change (IPCC)has found that the concentration of atmospheric carbon dioxide has increased by how much in the past 250 years?
A)150%
B)65%
C)35%
D)100%
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Page 17